Japanese Yen bulls remain on the sidelines ahead of the crucial FOMC policy meeting

• Japanese Yen attracts some intraday seller on Tuesday, even though the downside risk remains limited.
• Trade-related uncertainty and geopolitical risks continue to act as a tail for safe haven JPY.
• Divergent BOJ-Fed expectations further contribute to USD/JPY capping lead at the FOMC assembly.

The Japanese Yen (JPY) reverses an Asian session against its American counterpart and seems to be building on the acquisitions registered in the past two days. The uncertainty of US president's trading policies Donald Trump and rising geopolitical tensions keeps investors on the side, which, in turn, sees lending some support to safe haven JPY. Moreover, the bets that the Bank of Japan (BOJ) would walk more at interest rates in 2025, despite last week's pause, even another factor supported JPY.

However, optimism on the potential de-escalation of the US-China trade war and avoiding concerns about a US contraction prevents JPY Bulls from placing aggressive bets. Entrepreneurs seem to be reluctant and choose to wait more clues about the Federal Reserve (FED) cut rate, which will play a major role in influencing the US Dollar (USD) and providing a fresh impetus to the USD/JPY pair. Therefore, the focus on the market will remain attached to the outcome of a two -day FOMC meeting starting Tuesday.

Japanese Yen entrepreneurs seemed not focused amidst mixed clues, leading the important FOMC meeting

• The Bank of Japan struck a careful tone last week by falling for the growth and inflation forecasts, forcing investors to restore their bets for the next rate of increase in June or July. The central bank, however, said again that remains focused on increasing rates if the economy and prices are moving in accordance with its forecasts.
• The wrong US trading policies Donald Trump forgets the optimism led by the signs of avoiding US-China trade tensions and keeping investors. In fact, Trump on Sunday announced a 100% tariff in all films made in foreign countries. Moreover, geopolitical risks lend support to safe haven Yen.
• The Defense Ministry of Russia said Ukraine launched a drone attack that targets Moscow for the second night on Monday. It follows reports of the Ukraine's fresh attempts to cross the Russian Kursk region. It will come days after Russian president Vladimir Putin declared a three-day stop on May 8-10.
• In addition, Israel hit Yemen's targets in response to a ballistic missile attack Houthis who hit Israel's main airport on Sunday. Houthis warned on Sunday that they could struggle again and impose a comprehensive wind blockade in Israel by repeating the target of airports.
• Meanwhile, Trump said of possible trade agreements with some countries early this week and also signed that he was open to lowering the massive tariffs imposed in China. In addition, China's commerce ministry said last Friday that it was evaluating the possibility of trading in the US.
• In the face of data data, the Institute for Supply Management (ISM) survey showed Monday that the growth in the US service sector was taken in April. Adding to this, the signs of an elastic still in the US manufacture market contribute to concerns about a US backbone and act as a tail for the US dollar.
• Entrepreneurs, however, seem reluctant to put aggressive bets and choose to move to the edges early in a two-day FOMC policy meeting beginning this Tuesday. Investors will look for fresh clues about the path cut by Fed's interest rate, which, in turn, will influence the USD and the USD/JPY pair.

USD/JPY remains weak; Failure last week near 200-period SMA in H4 remains in play

From a technical point of view, the USD/JPY pair last week struggled to find the above 50% level of Fibonacci level of March-April and faced a decline near the 200-time simple transfer of average (SMA) to the 4-hour chart. Subsequent denial and negative oscillators in the sun -day/time -oras chart suggest that the path of at least resistance for the prices of the area is on the downside. Therefore, any attempt to recover back above the 144.00 mark can still be seen as a sale opportunity near the 144.25-144.30 supply zone. A prolonged strength beyond the latter, however, can trigger a short cover rally and allow place prices to recover the 145.00 psychological mark.

On the flip side, the weakness under the Asian session low, around 143.55-143.50 areas, has the potential to drag the USD/JPY pair to 143.30 intermediate route support to 143.00 mark. The next relevant support is peg near 142.65 regions, which if the definition is definitely exposed to the level of 142.00 before the currency pair eventually drops to 141.60-141.55 zone and the 141.00 round figure.